China's Xiaomi to set up India customer data center to deflect privacy concerns

[October 27, 2014]  MUMBAI (Reuters) - Chinese smartphone maker Xiaomi Inc said on Monday it plans to set up a data center in India next year to store local user data, as the fast-growing company seeks to deflect concerns about privacy that could hamper its efforts to expand overseas.

The move by privately owned Xiaomi comes after it said last week saying it was migrating some data on non-Chinese customers away from its servers in Beijing due to performance and privacy considerations.

Xiaomi, whose low-priced but feature-rich smartphones have made it the biggest smartphone vendor in China, entered India this year with plans to invest heavily to secure rapid growth in the world's third-largest smartphone market.

It sells its phones in India via Flipkart.com, the country's biggest online retailer, and said last month it planned to sell 100,000 phones a week in the country in October.

On Monday, Xiaomi said it had been moving Indian users' data from its Beijing data center to data centers of Amazon Web Services, the cloud computing platform of the online retailer Amazon.com Inc, in Singapore and the United States since early 2014. It said that process would be completed by the end of the year.

Xiaomi has faced several privacy controversies, including accusations from international security researchers and a government agency in Taiwan that it funnels unauthorized user data back to its servers in Beijing. Indian media reported last week that the country's air force had issued alerts to its personnel and their families against using Xiaomi phones on security concerns.

The Chinese company said on Monday it was attempting to contact Indian authorities for more details on local media reports, adding that it did not collect user data without permission.

(Reporting by Zeba Siddiqui; Editing by Kenneth Maxwell)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.